Executive Business Briefing

Here is a look at Wednesday's top business stories:

Stocks decline in Asia

TOKYO, July 10 (UPI) -- Stock prices on the Tokyo Stock Exchange ended lower Wednesday as the U.S. dollar's fall against the Japanese yen hurt technology and exporter blue chips.

Stocks also lost ground in Hong Kong; Seoul, South Korea; Taipei, Taiwan; and in Sydney, Australia.

Japan's blue-chip Nikkei Stock Average of 225 selective issues, which gained 191.05 points Tuesday, fell 207.59 points, or 1.9 percent, to 10,752.66. The broader Topix Index fell 12.88 points, or 1.2 percent, to 1,037.26.

Declines outpaced advances 981 to 362, while another 137 issues settled unchanged.

Volume declined to an estimated 668.03 million shares from 703.46 million shares changing hands on Tuesday.

Analysts said lingering worries about Wall Street's performance, weakness in the U.S. dollar and speculative futures-led selling sent the market lower.

The Dow Jones Industrial Average dropped 1.9 percent on Tuesday, while the technology-rich Nasdaq composite index fell 1.7 percent, despite a speech by President George W. Bush announcing a crackdown on accounting fraud.

The dollar, which dropped to a 9-month low of 117.72 yen in New York, was trading around 117.95 in Tokyo.

Experts said trading activity was sparse as investors kept to the sidelines in order to better monitor the shaky U.S. market.

The prospect of Typhoon Chataan bearing down on the Tokyo metropolitan area was another reason to remain idle.

While no major damage was reported by Japanese corporations, Central Japan Railway became a victim on concerns the typhoon may disrupt its services. The railway's shares lost 1.3 percent.

Meanwhile, among some of the active issues, Sony Corp. lost 3.2 percent, Toyota fell 1.6 percent, Bridgestone lost 2.1 percent and Fuji Photo Film dropped 2.4 percent.

Honda Motor lost 2.4 percent despite news that Japan's second-largest auto maker will boost production capacity at its Alabama plant, and that it set up a new plant in China to make Honda-brand cars to be sold in Asia ex-Japan and Europe.

Chip equipment makers were hit particularly hard after their U.S. counterparts, such as Applied Materials, dropped after Merrill Lynch cut their forecast for orders and capital spending in the sector.

Tokyo Electron lost 4.1 percent, Advantest fell 4.7 percent, Nikon dropped 5.0 percent and Canon lost 2.7 percent.

Elsewhere in Asia, prices ended lower on the Hong Kong Stock Exchange amid thin trading as the initial public offerings of CK Life Sciences and Bank of China (Hong Kong) drained the market of liquidity and kept investors sidelined. The blue chip Hang Seng Index lost 55.61 points, or 0.5 percent, to 10,787.54.

The lack of buying affected most sectors following losses Tuesday on Wall Street.

Analysts said less funds are entering the market as they are being reserved for IPO subscriptions.

This was put in black and white when CK Life Sciences said that the retail tranche of its IPO was 121.08 times subscribed, automatically boosting the size of that tranche to 50 percent of the total offer from the original 10 percent.

The biotechnology spin off from property developer Cheung Kong (Holdings), offered a total of 1.307 billion shares. Cheung Kong (Holdings) rose 0.8 percent.

CK Life is due to list on July 16, while Bank of China (Hong Kong) will start trading on July 25.

Meanwhile, Television Broadcasts sank 3.7 percent on concerns that its dominant position in Hong Kong's free-to-air TV market will be affected by local tycoon Li Ka-shing taking a sizable stake in rival Asia Television.

Among some of the other active issues, Hutchison Whampoa ended unchanged, HSBC Holdings lost 1.1 percent, Wing Hang Bank eased 0.4 percent, Bank of East Asia gained 1.6 percent and China Resources Enterprise lost 1.6 percent.

Prices also ended lower on the South Korean Stock Exchange, pressured by bouts of profit-taking. The Kospi Index Composite Index lost 7.28 points, or 0.91 percent, to 794.71.

Analysts said investors pocketed gains after Wall Street tumbled.

In trading, fixed-line phone operator KT Corp. dropped 2 percent and SK Telecom lost 1.4 percent.

Prices on the Taiwan Stock Exchange snapped their six-session winning streak, hit by a strong local dollar and falls in microchip issues. The Weighted Index lost 126.51 points, or 2.35 percent, to 5,262.01.

The Taiwan dollar rose to a new 13-month high inspired by the weakness in the U.S. dollar.

Taiwan Semiconductor Manufacturing lost 2.8 percent and Nanya Technology sank 6.8 percent, its daily limit after the chipmaker said it fell into the red in the second quarter.

Elsewhere around the Pacific region, prices ended lower on the Australian Stock Exchange, pressured by Tuesday's decline on Wall Street. The blue-chip All Ordinaries Index, which gained rose 24.30 points Tuesday, fell 30.20 points, or 0.94 percent, to 3,175.20.

Report: VoiceStream and AT&T Wireless in talks

NEW YORK, July 10 (UPI) -- The Wall Street Journal reported that VoiceStream Wireless, controlled by Deutsche Telekom AG, is in talks to merge with AT&T Wireless Services Inc., a move that would create the second-largest cellular phone company in the United States.

Citing people close to the talks, the Journal said any deal could be valued at $10 billion though it emphasized talks are "very preliminary" and may not result in any merger.

Both AT&T Wireless and VoiceStream have talked with a number of companies in recent months, according to the report, with no agreement reached.

Faced with high marketing costs, large customer turnover, lack of pricing power, and high costs of upgrading to higher speed networks, wireless telephone companies have been under pressure to consolidate in recent months.

VoiceStream is the smallest wireless company in the United States while AT&T Wireless is the third-largest.

People close to the current talks said executives from VoiceStream and AT&T Wireless have been discussing a deal that would combine the companies and make VoiceStream the dominant shareholder, the Journal said.

A deal between VoiceStream and AT&T Wireless would create the No. 2 wireless company with 25 million subscribers, 4.4 million short of the biggest player in the industry Verizon Wireless, a joint venture of Verizon Communications and Vodafone.

UPS reaffirms earnings outlook

ATLANTA, July 10 (UPI) -- United Parcel Service has reaffirmed its earnings outlook for the second quarter although it said it sees some of its package business going to competitors.

The company said it expects to post earnings per share of 50 to 55 cents when it releases its second quarter results on July 23.

Analysts on Wall Street are looking for UPS to post a net income of 54 cents a share in the second quarter, according to Thomson Financial/First Call.

During the second quarter of last year UPS earned 55 cents a share.

The company attributed some of its lost business to unresolved labor negotiations.

U.S. domestic volume levels in April and May were running approximately 2 percent below prior-year levels, consistent with the economy's general weakness, according to chief financial officer Scott Davis.

In June, the volume decline was 4 percent, resulting in total U.S. domestic volume for the second quarter of 2.6 percent.